Comments on: Kill the mortgage deduction and give it to entrepreneurs

By: robb1

robb1 — Wed, 16 Feb 2011 01:28:38 +0000

to add more, the small business does not need more debts, it needs a more favorable environment to survive and compete on a global level and with Asian cheap labor. And tax wise how we compete with countries like Singapore where corporate tax rates are way less? This has nothing to do with home mortgage deductions.

By: robb1

robb1 — Wed, 16 Feb 2011 01:18:07 +0000

sure Italy has greater ownership rate with no mortgage interest deduction, but they have a nominal if non existent property tax. If u take off the mortgage deduction u will reset the home prices lower instantly. From there well, perhaps an healthier market, but, in any case, the lesson has been thought already, we do not need more beating now with prices still going down and more looming foreclosures.

By: johnwasik

johnwasik — Mon, 14 Feb 2011 20:40:06 +0000

My intention is that the shifting of the break to entrepreneurs would be linked to creating jobs. It wouldn’t be a handout. The fundamental question here is: Will people buy homes without the tax break? I think so. Look at all of the items that have no tax advantage — cars, appliances, etc. As for people who own homes now, as I’ve noted in an earlier column, a tax credit should be considered. You don’t have to itemize to receive it. A good point was made about renters. That’s something worth studying. And for the record, I’m for a progressive tax system and was against extending the Bush-era tax cuts.

By: Gaius_Baltar

Gaius_Baltar — Mon, 14 Feb 2011 20:07:29 +0000

The real purpose of the deduction is to inflate real estate commissions. Without the deduction, housing prices would adjust so that overall, the after-tax price remained constant. But real estate commissions are based on the pre-tax price, so they’d decline.

@disgustedreader: The revenue raised from repeal would go a long way to balancing the budget. Why should other taxpayers subsidize you and your house? Answer: they should not.

@johnnyjr: Assuming what you say about the deduction funding start-ups, you must admit that it discriminates against renters who wish to start their own business. They don’t get to deduct their rent to free up funds, so why should they subsidize those who own their own home?

Further, this discriminates against who choose not to mortgage their family’s housing to start a business.

By: johnnyjr

johnnyjr — Mon, 14 Feb 2011 16:15:56 +0000

Taking away this deduction could have huge unintended economic consequences. It would negatively effect many sole proprietor business owners who make up 80% of the 20 million small business in America.

Many sole proprietors count on the mortgage deduction to expense their business equipment and expenses along with their mortgage interest. Without this deduction many would lose their ability to invest in their business and the ability to afford their mortgage.

This is one of the few tax advantages available to true small business owners and one that stimulates economic development among middle class entrepreneurs. Getting rid of it would only further harm our economy!

By: The0Larch

The0Larch — Mon, 14 Feb 2011 14:35:24 +0000

The mortgage deduction has absolutely nothing to do with the cost of a home. It does not affect the price at all, though “Mallach cites one study found that barely 10 percent of homeowners earning less than $30,000 take the deduction, but they pay higher prices for their homes to benefit more well-off homeowners.” Utter garbage. What columist relies on the comments of one unamed study to write a story for a political motivated orginisation that no one has ever heard of? Trying to acheive a political outcome with fiscal policy is what brought the market to its knees in the first place. Funny also how this has become a zero sum game if entrepreneurs need a deduction give it to them.

By: gmroder

gmroder — Sat, 12 Feb 2011 20:21:14 +0000

Um ok, let’s take a tax deduction away from people who do use it and give it to someone who might use it, if they try and start a small business and don’t go broke before they file their return, in which case they won’t need the deduction because they did not make any money.

That is brilliant!

By: RynoM

RynoM — Sat, 12 Feb 2011 20:16:49 +0000

The tax break is classic redistribution of income. We homeowners use the federal government’s handling of tax dollars to spare us from the interest we take on, and people who do not own homes subsidize us with their own tax dollars. I do benefit from this form of socialism, for that is what it is, but I could also live without it. I think it’s an idea whose time has ended.

By: hyperlux

hyperlux — Sat, 12 Feb 2011 20:01:51 +0000

Take it away immediately – but only from homeowners’ additional properties. If you look at those who amass money with “buy to let” properties – those are the folks who helped to inflate the housing market by turning tricks on those who’ve never owned. If the mortgage interest for these additional properties were not deductible, I bet a lot less of them would be keeping these extra homes – and for those who can afford it, they can pay the justifiable tax. More houses on the market would likely prevent bubbles from getting so bloated, and those first time buyers wouldn’t have to pony up such massive down payments.

By: DisgustedReader

DisgustedReader — Sat, 12 Feb 2011 19:34:48 +0000

Is there a problem with the logic in this article? “Most homebuyers don’t even itemize to take advantage of it. Nixing it would make homes more affordable.”

How could nixing something the author claims is not even used by many, thereby not impacting U.S. tax revenues, but benefitting those who do take advantage of it, make homes more affordable?

The author revealed that nixing this tax break is not about tax revenues (since he claims few take advantage of the deduction). Therefore, he’s simply gunning for the few like myself, living in modest middle class homes that are affordable because we take this deduction.

“If we don’t get rid of those few middle class stragglers leftover from the purge, the aristocracy cannot fully gain control. Get rid of that mortgage interest deduction! I don’t care if it has no real impact on tax revenues, that’s beside the point!”